End of QE Worries Hit Homebuilders

Wednesday afternoon the sector sold off roughly in line with the broader market in the wake of the comments from Fed Chairman Ben Bernanke.

That’s not the case today. Homebuilders litter the bottom of the S&P 500 amid apparent fears that still-rising long-term interest rates will put the kibosh on the strong order rates builders have been reporting.

“The logic being that if mortgage rates rise too much too fast, it could seriously derail the housing recovery,” said Raymond James’s Buck Horne.

He added that while there hasn’t been much evidence of a major slowdown, “rates are rising quickly right now, which is enough to send the stocks into a tailspin.”